Get ready for a wave of bank failures

So if i have money in a bank that collapeses then I lose my money?

reply to post by projectvxn


I am just wondering if Jim Marr's book Rise of the Fourth Reich is apropos here. We are seeing nationalizing of banks. The failing of companies and buying up of these companies by other companies which in turn will make them into huge conglomerates. The big will get bigger and monopolies will appear and competition will become a thing of the past.

The time is near where the elite can show their hand. Power is being concerntrated. If we were to follow the flow of money and papertrail then I am sure we can see where all this is leading.

reply to post by LucidDreamer85


In theory not if your bank is FDIC insured, AND the amount you have on deposit is equal to or less than the limit on the FDIC insurance.

If you have more in the bank than the insurance covers, the difference can be lost.

If enough banks collapse, there is always the possibility that there will not be sufficient funds to cover all the losses, and you could lose your money.

Of course, you could take your money out of the bank and put it under your mattress, and if the dollar becomes seriously devalued, even though you hold the paper, you could still lose all the purchasing power of your money.

There is no clear "right" thing to do. even buying precious metals, like gold and silver are not guaranteed to safeguard your money. If you buy gold now, for instance, at nearly $1000 and ounce, you better hope the currency collapses, because if it doesnt, and the gold price goes down to its more stable value of around 3-400 an ounce, you could end up losing half your money if you arent right on top of the trend. (And not everyone can be, now can they?) You are always at risk of having someone "slip out" a press release saying there is a run on gold prices so that the common man is buying high right when the big investors want to dump the stuff they bought at $850 an ounce several months ago.

There is no clear, guaranteed safe thing to do right now. Buying a piece of good land or real estate seems a reasonable move to make, if you can afford it and it makes sense for you as an individual. Good land will always have value, and now the prices are pretty reasonable. And with a good piece of land you always have the option of growing food. In case your shiny pieces of metal and paper suddenly have no value. But, even that isnt guaranteed.



[edit on 22-2-2009 by Illusionsaregrander]

Underhanded nationalization? I'd say so:
Gov't reportedly mulls taking larger stake in Citi

Published: 52 minutes ago
WASHINGTON (AP) - Citigroup Inc. is reportedly negotiating with government officials to have the U.S. boost its stake in the troubled bank to as much as 40 percent, The Wall Street Journal said late Sunday, citing people familiar with the situation.

Such a move by Citigroup would result in the New York-based bank ceding far more control to the feds than executives likely desire, and would dilute shareholders' investments. The Journal, which said Citigroup made the proposal to its regulators, noted that sources say executives would prefer to keep the government's stake closer to 25 percent.

But with the company's shares trading at their lowest point in nearly two decades, Citigroup is seeking ways to stem further losses.

On Friday, shares of Citigroup fell 22 percent to close below $2, and Bank of America Corp. shares also sank, as talk of the banks' nationalization spooked investors. Both banks already have received significant help from taxpayers as the government has rushed in to try to save the financial sector. The White House, however, has insisted it's not trying to take over the two ailing financial institutions.

REMEDY FOR "The Underlying Fraud In Banking"

I received a letter this morning from a chief lending officer at a small mutual savings bank.

He asserts that they are levered at a moderate 10:1, and their ROE ranges from 4-6% depending on the economy. They are profitable - today.

Their bank makes loans held on their books - the way bankers of old before securitization operated, and the only way to guarantee that actual underwriting takes place. Their delinquencies for 1-4 family homes are elevated at 1.2%, but are resulting from job loss, illness and other similar life events - which happen in both good times and bad.

There are literally thousands of banks and credit unions just like this across the nation.

The FDIC on Friday mandated what amounts to a 20 basis point "levy" on deposits. From all banks. But their shortfall, both actual and predicted, comes from willful and direct violations of Title 12, Chap 16 Sec1831o.

Specifically, IndyMac bank (and one other), it has now been learned, was permitted to improperly treat capital by a member of the OTS, which is a federal regulatory agency run by Treasury. This is not conjecture it has been discovered to be fact and in addition, the person responsible did the same thing during the S&L crisis.

This is not an "accident" folks.

But PCA requires:

(a) Resolving problems to protect Deposit Insurance Fund

(1) Purpose

The purpose of this section is to resolve the problems of insured depository institutions at the least possible long-term loss to the Deposit Insurance Fund.

(2) Prompt corrective action required

Each appropriate Federal banking agency and the Corporation (acting in the Corporation’s capacity as the insurer of depository institutions under this chapter) shall carry out the purpose of this section by taking prompt corrective action to resolve the problems of insured depository institutions.

Not requests, REQUIRES.

The word shall in statute is an important "term of art" in legislation; it is not subject to interpretation or desire. It means what it says - SHALL.

Among other violations there are institutions such as GMAC (and IndyMac and WaMu before them) that have been offering above market-rate CDs, which is one of the practices in 12/Ch16/Sec1831o that is subject to regulation and is required to be curtailed by any institution that is in trouble.

Further, the compounded cost of TARP money (under the old rules) is close to 9%, and you have to look at compounded cost just as you must look at compounded returns.

Now go look up above at "SoundBank's" ROE. 4-6%.

It is not possible for that bank to take TARP money and make a profit from it unless it was to engage in the very unsound practices that got us into this mess!

This leads to the following inescapable conclusions:

The entirety of TARP is in violation of PCA as it is not possible through prudent lending to earn more than this capital costs. TARP IS AND WAS UNLAWFUL.
The actions of "troubled institutions" such as GMAC, IndyMac and WaMu (some of which have failed, some of which have not - yet) is directly contrary to the requirements of the PCA law and yet regulators have willfully ignored these requirements.
OTS in particular has been caught with people on their staff that improperly permitted reclassification of capital as a means of avoiding PCA; since these people acted in concert with one or more persons at the bank involved they conspired to commit this act. Is there a "bank fraud" prosecution in here? If so, where is it?

I've said it before, I'll say it again, there are a lot of Madoff's and Stanford's out there. Many of them using entire institutions like Stanford. The government, for some reason is bankrolling all of this. Will rampant fraud uncovered as this depression gets worse destroy the banks? Big and small are under fire. Many of the banks closing in this economy are small, most have been responsible, but it is the large fraudulent ones that are saved, and flushed with tax payer money. We're covering fraud losses for those who committed the fraud to begin with.


I can't believe what is happening in this country. It really scares the hell out of me that we let it get so bad, so out of control that it now threatens the very fabric of what America is. What its stated purpose is. We are being hijacked as a nation, there is a coup taking place right now and both democrats and republicans are in on it. They profit from loss, they always have, and this is the fruits of their labor, the result of our willful ignorance, our willing to argue about what Inalienable Rights mean. While such rights were being taken from EVERYBODY. Partisan squabbling dragged the entire country into a state of fear, addicted to it we did nothing to change it. We elected a democrat instead. That's change? The whole country has been screwed for 100 years now and we're still being duped into thinking that Republicans and Democrats know what the hell they're talking about?

America indeed needs change. We need a third party. A champion of the Constitution. Some one who will ACTUALLY shrink government, who will remove these stupid restrictions on our freedoms, these illegal taxes, this criminal foreign policy. I'm done arguing about which of the two national parties have it right, because neither do. It is two opposing dogmas in the face of daunting and inescapable realities. You cannot fight a problem of fact with ideology and lying to justify the means of ideology. That will destroy us. The Constitution is a guideline. WE guarantee our rights with everything we are and whatever we are armed with. It is our country, and we're letting such a small group of people who are very stupid make decisions for 300 million of us, and billions around the world by extension. This is NOT freedom it is fascism, it is despotism, and it has to stop.

I love this country to much to let political zealots flush it down the toilet for childish, selfish notions of reality. One only they seem to justify. It is about time responsibility fell on our shoulders. It is about time we demanded that the line be drawn, this far-no further! It makes me truly sad to what this country, that took me in and opened opportunity to me, the nation who I now give a brother to, fall to pieces. And I feel helpless in not being able to do anything about it. It kills me to see Americans fight each other over political ideology when they should be fighting for the Constitution, which makes no mention of political parties, and the only ideologies are that of Life, Liberty, and the Pursuit of Happiness. To be free to PROTECT OUR SELVES however we see fit, to have what we work for. To have a Fair Represented Tax policy, a small government that respects our self governance and allows us to take care of our needs as we see fit.

We live in a world that could blow up tomorrow in a series of mushroom clouds because we let the government get way to big, and the foreign policy that arose from that has been arrogant, self righteous, and downright evil. This policy must be reversed. We cannot continue to run an antagonistic empire. Doing so puts the world at risk of annihilation and it is no one nations prerogative or right to destroy the world at the whim's of political or religious zealots. To make that decision is inherently immoral and evil, and that's the decision we've allowed our leaders to make for us and billions of others. All while the rob us. They tax wealth that hasn't even been created yet, and people think they're getting tax cuts? Neither party has EVER cut taxes. They only move them from place to place depending on where the wind blows, or whoever is paying the least attention.

Government sponsored fraud and murderous foreign policies need to stop. We need to return to the constitution with expediency and clarity or we will lose our nation to idiots like this. I hope God does bless America, because everyone else is cursing us, and rightly so, because of idiots like this.

HSBC plans to halt personal loans, mortgages: report

And yet they advertise saving and loans on tv...Hmmm, You know I always tell my significant other that if the banks, in this current crisis, start to advertise you can be sure they're in trouble. And here we are.

B of A is doing the same thing, so is Wells Fargo, JP Morgan. Hell even Ditech is advertising Option Arm adjustments I guess they know it isn't over yet. They just pawn off the new government mandated mortgages to some unsuspecting person(Because it's guaranteed by the Fed) before the mortgage holder default and ruin the government and the economy making the housing crisis even worse.

For those that don't think there's a depression here and now. Too much evidence has been presented to avoid this reality. We can't paint it rosy now that we know it's a turd.

As i understand small regional banks in the US ( due to S&l scandel reforms mostly) are in comparative pretty good shape and it wouldn't in my opinion make any sense to help with the fear mongering that ALL banks ( because their banks i suppose ) MUST fail. Either way this is going to be a VERY bad year for big 'commercial' banks even if various world governments can gain the mandate ( despite all the riots ) to keep bailing them out. These banks should either be allowed to fail ( with 'bail outs' only to individuals and then to a set cap) or nationalized so that that there will be a guarentee of repayment over a longer less economically devasting term.

This isn't rocket science and the world economy doesn't have to go down in flames but obviously it will as long as those in control tries to keep the current predatory system in place.

I particularly like Michael Hudson's writings on these issues:

I learned the reality a few years ago in London, talking to a commercial banker. “We’ve had an intellectual breakthrough,” he said. “It’s changed our credit philosophy.”

“What is it?” I asked, imagining that he was about to come out with yet a new magical mathematics formula?

“The poor are honest,” he said, accompanying his words with his jaw dropping open as if to say, “Who would have guessed?”

The meaning was clear enough. The poor pay their debts as a matter of honor, even at great personal sacrifice and what today’s neoliberal Chicago School language would call uneconomic behavior. Unlike Donald Trump, they are less likely to walk away from their homes when market prices sink below the mortgage level.

www.counterpunch.org...

The following article gives more of a historical background; by far the best i have seen in the last year ( 14 months ).

www.counterpunch.com...

Have not gotten to his books yet but i'm thinking i should.

Stellar



[edit on 1-3-2009 by StellarX]

Just out of interest how many banks were there before the American depression and how many after it does anyone know. And is this the same plot as then, that the big sharks gobble up all the little fish so you end up with just a few super banks?

reply to post by magicmushroom


Well I think you've answered your own questions.
Banks love consolidation..Well, bankers do anyway.